Meal Ticket for Life
Waggott v Waggott  EWCA Civ 727 (11 April 2018)
The latest judgment from Lord Justice Moylan in the Court of Appeal has given the clearest indication yet as to the judicial mood music when it comes to spousal maintenance payments. Far from the supposed ‘meal ticket for life’ headline that has perhaps unfairly been used in many circles – a point made by James Turner QC in this case – the Court has to make its decisions based on the ‘proper application of the 1973 Act’.
Briefly, the circumstances leading to the Appeal by the wife (and cross-appeal by the Husband) arose from the final decision in the Central Family Court by Recorder Tidbury on 16 September 2016 whereby Kim Waggott, 49, had been awarded a settlement of £9.76m and £175,000 in annual maintenance payments for the rest of her life. Unhappy with the judgment, Mrs Waggott appealed, asking for an increase of £23,000 a year in the annual maintenance payments. In his cross-appeal, Mr Waggott sought to provide a fixed time period on the maintenance term, expiring in February 2021 when Mrs Waggott will be 52 years of age.
In his judgment, Lord Justice Moylan provides a detailed analysis of the law and authorities in addressing what he considered to be the principle issues in this case, namely:
(i) Is an earning capacity capable of being a matrimonial asset to which the sharing principle applies and in the product of which, as a result, an applicant spouse has a continuing entitlement to share? ;
(ii) How should the court assess whether an award determined by application of the sharing principle meets the party’s needs? More specifically to the arguments advanced in this case, to what extent is it fair for the wife to be required to use her sharing award to meet her income needs when the husband will meet his needs from earned income? ; and (as a subsidiary issue)
(iii) does the ‘compensation principle’ apply not only when the applicant spouse has sustained a financial disadvantage, but also, separately, when the respondent has sustained a financial advantage during the marriage?
Areas of Dispute
The Judgment sets out what the two main areas of dispute were as:
(a) whether the wife should be entitled to share in the husband’s post-separation bonuses; and
(b) whether the wife should be awarded open-ended maintenance or whether, as argued by the husband, she would be able to adjust without undue hardship to the dismissal of her claims at the end of the proposed 5 year term.
and stated that underlying the latter issue was the question of how the wife’s income needs would be met and the extent to which her share of the capital assets should be deployed to meet those needs.
In answer to the principle issues, Lord Justice Moylan came to the conclusion that in respect of the first, (Is an earning capacity capable of being a matrimonial asset to which the sharing principle applies and in the product of which, as a result, an applicant spouse has a continuing entitlement to share?) then the ‘clear answer is that it is not’.
And in respect of the second, (How should the court assess whether an award determined by application of the sharing principle meets the party’s needs? More specifically to the arguments advanced in this case, to what extent is it fair for the wife to be required to use her sharing award to meet her income needs when the husband will meet his needs from earned income?) he stated that the answer is that the latter factor will be relevant to the court’s determination of the former issue. What is sauce for the goose……
On the final issue, that of the compensation principle, the Judge commented that to succeed in this area, the court would have to determine, on a balance of probabilities, that the applicant’s career would have resulted in them having resources greater than those which they will be awarded by application of either the need principle or the sharing principle. Further, the court must separately determine whether, and if so how, this factor should be reflected in the award so as to ensure that it is fair to both parties.
The wife’s appeal was unsuccessful on all counts.
As to the husband’s cross-appeal, Lord Justice Moylan was persuaded that this was a case suitable for imposing a fixed non-extendable term of maintenance. He states ‘[I] appreciate that the husband may well have continued to generate a very substantial income and that his financial position will have been enhanced as a result. But, first looking specifically at section 25A(2), it is plain to me that the wife would be able “to adjust without undue hardship” to the termination of maintenance. To require her to use the above proportion of her award would not be unfair having regard to all the section 25 factors. She would still have free capital of £3.6 million and housing of £2.75 million‘.
Mr Waggott succeeded in securing a clean break, the Judge imposing a term order expiring on 1st March 2021 with a section 28(1A) bar.
Get in Line
This is the latest in what are becoming a long line of judgments in respect of spousal maintenance whereby it could be said that the tide is or perhaps already turned against those seeking long term maintenance, the meal ticket for life’. it is an area we have discussed before, and in a previous post here and also here.
Perhaps this latest decision will go some way towards creating a more uniform approach across the courts nationwide. If any of our readers have experiences of a different, or have noticed the tide already having turned we would love to hear from you.
If you would like more details on this or want to discuss your family law matter, please do not hesitate to contact James or Frank. Paradigm Family Law offers a free initial consultation and our fixed fee solutions cover financial proceedings from start to finish. You can call us on 01904 217225 or email us to [email protected].